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Anti-suit injunction – breach – damages

In National Westminster Bank plc v Rabobank Nederland [2007] EWHC 1742 (Comm), Colman J considered the measure of damages in a case where proceedings had been commenced overseas in breach of an anti-suit clause. Holding that pre-CPR authority was no longer applicable, he found that the Claimant was entitled to recover damages in the amount of its costs assessed on the indemnity (not standard) basis. He further awarded the Claimant the costs of the English proceedings, also assessed on the indemnity basis, and interest.

The case is significant in confirming that, post-CPR, different principles govern the assessment of damages and costs; and that it is possible for a claimant to recover more as damages than it could do pursuant to a costs award. CPR 44.4 introduced the concept of proportionality into the assessment of costs, with the result that the principles which now govern the assessment of costs no longer correspond to those governing the assessment of damages. The assessment of damages (as opposed to costs) was governed by ordinary principles of remoteness, mitigation and causation, and the burden was on the defendant to show that any item of costs was unreasonable.

Colman J awarded the Claimant its costs of the English proceedings, also assessed on the indemnity basis. Commencing proceedings in breach of the anti-suit clause was analogous to commencing proceedings in breach of an arbitration or exclusive jurisdiction clause, and the court should express its disapproval by awarding indemnity costs.

As regards interest, it was argued that the Claimant would receive a windfall if it was awarded interest at the usual commercial court rate of base plus 1%, because there was evidence that it could have borrowed at the lower rate of 6 months LIBOR plus 0.15 - 0.5%. Colman J rejected this argument. In reality, the Claimant would have had to borrow at the LIBOR rate compounded throughout the relevant period, which was roughly equivalent to the usual commercial court rate.

Compare jurisdictions: Arbitration

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